PairGain Up 15%; Takeover Rumor, Competitive Position Cited
By Shawn Young
NEW YORK (Dow Jones)--Shares of PairGain Technologies Inc. (PAIR)
skyrocketed Thursday, gaining 15.2% in very heavy trading as takeover rumors
circulated and investors perceived an improvement in the company's competitive
standing, observers said.
The rumor is that Lucent Technologies Inc. (LU) or ECI Telecom Ltd. (ECILF) is
going to buy the Tustin, Calif., telecommunications equipment maker, said
Salomon Brothers Inc. analyst Steven Levy.
The Lucent rumor was repeated by several sources, none of whom claimed to
have confirmation. PairGain officials did not immediately return a call seeking
comment.
"There is logic for both of those (alleged buyers)," Levy said, "but I don't think
it's going to happen."
The company is a frequent subject of takeover rumors, Levy said.
PairGain also is benefiting from a recent announcement by Aware Inc. (AWRE)
that deployment of its asymmetric digital subscriber line technology will be
delayed until at least the end of next year.
"ADSL is the next competing technology," said one analyst.
ADSL will not compete directly with PairGain's high bit rate digital subscriber
line technology, but there will be some overlap, Levy said.
A delay for Aware and its peers is seen as a plus for PairGain and its chief
competitor, Adtran Inc. (ADTN), analysts said.
Adtran shares rose 1 5/8, or 5.5%, to 30 1/16 on Nasdaq volume of 1.8 million,
compared with a daily average of 589,500. PairGain shares rose 2 3/4 to 20 7/8
on Nasdaq volume of 17.2 million. The daily average is 4.4 million.
The technological breather comes as PairGain executives appear less worried
about competition from Adtran and ADSL, Levy said.
Another analyst said it is also possible PairGain will announce new contracts
soon.
"Dow Jones News Service"
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